Sports betting in a nutshell
I am sure everyone has heard of sportsbooks and are clued in on the basics. For those of y’all that need a refresher, sportsbooks are betting sites where you can wager your real money by placing bets on various global sporting fixtures. The betting odds are determined by the ‘house’ and generally the house will always take a ‘vig’ when bettors place their wagers.
Depending on the sportsbook you use, you will be allowed to wager on both pre-match and in-play bets on most major leagues, including the NFL, NBA and NHL. Some platforms even think out of the box and get you out of your comfort zone, by allowing you to bet on niche non-traditional betting markets like elections and awards shows like the Oscars and Grammys.
- Sets own odds and betting lines
- Takes a ‘vig’ for all bets placed
- Banking fees are possible
- Traditional betting is banned in some states
- Cash out is available at some sportsbooks
- Various betting options, including pre-match and in-play markets
The 411 on prediction market sites
When I compiled my what is event trading guide, I explained how prediction markets work. In a nutshell, prediction markets allow you to trade on the outcome of real-world events. All trades are binary outcomes (Yes or No), and winning positions are settled at $1 while losing positions close at $0. Unlike sportsbooks, prediction sites do not set their own contract prices and there is no need to break out the calculators to figure out the contract values. Instead, the value of every contract is determined by the number of trades made by other users on the likelihood of an event occurring.
Also, while sports betting sites odds are read by multiplying your stake by the specific odds, prediction market contract prices work differently. If you want to know how to read market prices for future event contracts, check out the example below for the 411:
Let’s assume that Liverpool are $0.65 to win their next game against Manchester United. This price indicates that traders believe there is a 65% chance Liverpool will beat their rivals. If you purchase $100 of Yes contracts, you will receive 153.85 contracts ($100/0.65). If Liverpool wins the game, you will receive $153.85 ($53.85 in profit). If Liverpool draws or loses, then you will lose your $100.
- Contract prices are based on the trades made by other users
- Trading and non-trading fees are possible
- Regulated by the Commodity Futures Trading Commission and available in all 50 states
- Can close positions early by selling contracts if there is sufficient market volume
- Several future event contracts, including sports, elections, and pop culture predictions
Prediction market vs sportsbooks: Have a gander at the differences
You should be clued in on how prediction markets and sportsbooks operate by now, and as you can see, there are several differences between these platforms. Have a gander at the table below to get the lowdown on the main differences of each platform:
| Feature | Prediction sites | Sportsbooks |
| Model | Peer-to-peer exchange | House vs player |
| Function | Trade on the outcome of real-world events, and contract prices are determined by trades made by other individuals | Offer betting on various markets and odds set by the house |
| Platform fees | Trading and non-trading fees are possible | Takes a ‘vig’ for all bets placed, and there could also be deposit and withdrawal charges |
| Availability | Available in all 50 US states, provided the platform is regulated by the Commodity Futures Trading Commission (CFTC) | Traditional sports betting is not legal in some US states |
| Event options | Sports outcomes, election and political results, economic indicators, crypto projections, climate forecasts, culture predictions | All major sports leagues and tournaments, plus niche non-traditional betting markets like elections and awards shows |
Pros and cons: Sportsbooks vs prediction markets
Before you pick a side, here’s a quick look at the pros and cons of sportsbooks versus prediction markets:
- Several reputable prediction sites and sportsbooks
- Diverse event options
- Exclusive bonuses and rewards
- Fees are incurred for both platforms
Verdict - The choice between prediction markets vs sportsbooks boils down to preference!
You should have the gist now of the prediction markets vs sportsbooks debate. In simple terms, there is no superior option, guys and gals, and it all boils down to what you prefer.
If real money sports betting is more your fancy, then you should use licensed and regulated sportsbooks. If you are more of a trader and enjoy buying and selling positions, you will have a blast with prediction market sites, and there are plenty of options to choose from, including CFTC-regulated sports prediction market sites, where you can trade on several major sporting events like the Super Bowl and NBA Finals.
If you are interested in trading and want a break from traditional sportsbooks, then prediction markets should be right up your alley. Take a peek at the banners on this page to find reputable prediction sites and use the banners to sign up and start buying and selling contracts.
The best prediction market sites we recommend
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Prediction market vs sportsbooks FAQs
Is real money betting available in all US states?
No, traditional betting is not available in all states. Some states have banned sports betting, including Texas, Utah, and Hawaii.
Can I use prediction markets in all 50 US states?
Yes! CFTC-regulated prediction sites are available in all US states, and these platforms operate as Designated Contract Markets.
What types of future event contracts are available at prediction sites?
You can buy and sell contracts on several future events, including sports outcomes, election results, culture predictions and economic forecasts.